Discuss about the Perspective of Business Negotiation Strategies.
In the current scenario, the situation that Matt faces tends to arise from the lack of productive discussion on the part of Red Star Holdings and Matt. Moreover, this arises despite both parties having interest regarding revenue generation and better set of commercial prospects. Matt requires reiterating the benefits that can be facilitate to both him and Red Star through increasing the degree of flexibility in negotiations coupled with improving the quantum of compromise on both their parts. Bereft of the fabrics manufactured by Red Star, Matt’s business plans along with introduction of his clothing line next year can experience adverse repercussions. However, on the other hand, Red Star Holdings has ambitions towards penetrating the Australian fabric and clothing market. Thereby, both the parties can benefit through promoting co-operation amongst each other in terms of trade.
In these circumstances, it could be prudent to infer that integrative bargaining can be adept as regards to alleviating the situation faced by Matt. The fabrics manufactured by Red Star Holdings have its unique properties that make it relevant for Matt to procure the material for his clothing brand. Moreover, Matt’s creative vision pertaining to style and fashion coupled with his interests regarding utilizing Red Star Holding’s materials in his clothing facilitates newer sets of opportunities for Red Star. Red Star aims towards penetrating foreign markets and thereby through capitalization of offshore trading opportunities; the company can facilitate market development. Further, in terms of revenue generation both Red Star and Matt would be benefitting out of the trade deal. Ying (2013) stated as compared to positional bargaining that entails compromise on the part of one of the parties in order to facilitate agreement; integrative bargaining can result in resolving conflict and facilitates the resolution of disputes.
Therefore, it is inferred that integrative bargaining can enhance the degree of benefits that can be derived by Matt out of the commercial arrangement with Red Star. The degree of alignment of operation of the two parties can in turn create a synergic effect. Zhang, (2016) mentioned that through implementation of the integrative bargaining strategies of negotiation, the parties involved in the negotiation can trade off issues and facilitate in resolving the different set of conflicts. Thus, through creation of a win-win situation, the benefits are distributed amongst the parties involved in the negotiations.
In terms of negotiations, there are several set of factors determining the outcomes pertaining to the strategies implemented by parties to such negotiations. The degree of complexity pertaining to the resolving of issues is aggravated in an international context whereby the parties to the negotiation belong to different cultures. Moreover, the probability of an outcome favorable for the parties diminish as the degree of alignment between their cultures diminishes. The prevalence of globalization has aggravated the quantum of interactions between individuals and organizations belonging to different cultural backgrounds. Liu (2014) states that the negotiations relating to Chinese firms tend to include issues pertaining to communications, drafting of trade contracts, bargaining the terms of the contract along with facilitating their implementation.
Ying, (2013) advocated that traders and organizations undertaking trade negotiations with Chinese firms tend to find Chinese companies as imprudent, bereft of any formality and lacking adequate degree of business communications skills. Moreover, the formal mannerisms and aggressiveness regarding business from other developed economies are seen as insincere on the part of Chinese companies. To facilitate negotiations with Red Star, Matt requires understanding the factors determining the negotiations skills of Chinese firms arising out of cultural context. The primary determinants regarding Chinese manner of negotiations have arisen out of a culture that has been shaped through the philosophies of Confucius and Lao Tzu amongst others. The properties that helped shape Chinese negotiations tend to arise from a tendency towards survival and development and upkeep of relationships.
Moreover, the “guo qing” (extraordinary circumstances) regarding high degree of political and diplomatic dynamism that China has been subjected to in the last two centuries had impactful repercussions upon Chinese negotiation manner. The degree of invasions that China was subjected to, from the opium wars up until gaining sovereignty on Hong Kong from the British has deeply affected the tendency of bargaining by Chinese firms. These aggravations in the level of bargaining and hardening in terms of negotiations by Chinese firms and business houses are fueled by nationalistic sentiments. Nationalistic sentiments have fuelled aggravation in the level of bargaining and hardening. The open door policy implemented by the Chinese government had resulted in many Chinese businesses on opening up negotiations concerning trading of goods to be manufactured in China.
Guanxi concept of China tends to foster strengthening of commitments coupled with facilitation if obligations based on reciprocity. Thereby, through utilization of Guanxi it can be stated that the outcome of negotiations can be tilted in favor of Matt. Moreover, hiring an intermediary in order to facilitate conversation with Ms Zhang and other relevant decision makers of the company can result in a more rapid alleviation of emergent set of trading issues. Moreover, Matt himself should initiate the negotiation talk as being the owner of the clothing line, his personal presence in negotiation dialogues can provide relevance to it. Further stated that in the context of Chinese businesses, it is pertinent that despite being adversarial the negotiators tend to give in towards maintenance of long term business relationships.
In terms of negotiating strategies with relation to Chinese suppliers, the major tactics shall be to employ a Chinese speaker who has high degree of fluency in Chinese Mandarin in order to streamline the dialogue process. Next, the discussions as regards to the contracts are to be undertaken once again, assimilation of knowledge about production process and input material regarding preparation of the fabric is essential. Moreover, visiting in person the supplier’s premises and facilitating face-to-face interaction regarding the shipments pertaining to the fabric is essential. However, no degree of risk coverage can be successful through a single supplier. Thereby, facilitating increase in the number of supplier can alleviate the weaker position that Matt currently is in regarding his clothing brand. Moreover, it shall be imperative not to show desperation by Matt concerning the supplying of fabric material as that shall aggravate the process of avoidance of Matt by Red Star.
The factors that have shaped Chinese philosophy tend to be primarily anti-western in the sense that the once stagnant economy has opened itself up in the wake of the last decade of previous century. Thereafter, it has hardened its bargaining characteristics when dealing with foreign clients. In order for Matt to facilitate a successful negotiation that ends up benefitting his business requires focusing on resolving cultural barriers, fostering a sense of patience in due alignment with Confucian philosophy. Moreover, Matt should be delving towards creation and sustenance of a harmonious relationship with Red Star in tandem with Lao Tzu’s philosophies. Thereby, the degree of non-alignment about the two cultures, Chinese and Australian, can be diminished by a considerable extent. Threatening to walking out of a negotiation or displaying impatience regarding the communication method of emailing as proposed by Ms Zhang shall result in Matt being construed to be insincere as per Chinese culture. Thereby, Matt is required to practice patience concerning the betterment of communication and enhancement of coordination. Moreover, Matt can improve his business prospects through rational set of judgments. He can do this through finding alternative sets of suppliers producing similar set of fabrics that Matt requires for his clothing line. Thereby, Matt requires to focus on enhancing supplier sourcing strategies for his clothing business.
Aspetege and Karlsson (2014) stated the fact that negotiations in China tend to be undertaken on a longer timeframe as compared to that of western business. Thereby, Matt should not rush towards seeking affirmation or higher degree of responsiveness through aggressive tactics. It takes a great deal of effort and negotiations on the part of Western firms to ensure face-to-face negotiations. Thereby, it is imperative that patience is showcased on Matt’s part regarding waiting for appropriate responses from Red Star. In this manner, Matt can be effective in increasing the degree of responsiveness of Red Star toward their prospective business negotiations. Moreover, it is relevant on the part of Matt to understand the key decision maker of Red Star Holdings such as managing director or proprietor or partner and thereby approach that person or persons. In the current case through use of integrative negotiation strategy, Matt is required to convey the limitations to trading that is imposed by Ms Zhang due to probable communication by barriers imposed upon by her. Moreover, Matt can reveal the potential degree of harmful effects that are to be occurring, through appearance of skin rashes, out of the fabrics manufactured by Red Star to Ms Zhang and thereby capitalize upon the information in managing a favorable trade deal.
Alternatively, Matt can rely upon establishing an overseas branch of his clothing business in China in order to relate more to the cultural context and aggravate the degree of search for an alternative seller for such fabric. Moreover, there can be adverse repercussions regarding the potential risks that are entailed through adverse effects on skin through use of such fabric. Thereby, Matt stands to lose potential set of consumer for its clothing line due to the skin rashes of the fabrics. Therefore, Matt can initiate negotiations concerning producers of other sets of fabrics, which have their own distinct set of positive characteristics. Moreover, Matt faces a dilemma relating to business decision whereby the probable set of problem arising out of skin rashes may negatively affect the revenue generation prospect of the firm. Presence of a branch of Matt clothing company in China could enable Matt in undertaking decisions regarding finding the set of prospect suppliers.
Additionally, the cultural barrier faced by Matt can be minimized by establishing a branch office in China that enables Matt in acclimatizing to the business and negotiation norms prevalent in China. Further, presence of local Chinese staff in Matt’s business through offshore branch in China shall diminish the degree of alienation that Matt can be subjected to regarding business deals. This is to be coupled with facilitation of effective communication channel with Chinese suppliers and can enhance the probability of favorable terms in favor of Matt in business agreements.
The current case displays situations that entail several set of ethical dilemmas. In terms of Deontological principles, the basic premise was to ensure commitment towards a predetermined set of principles Gao, 2016). There arises a context whereby Matt is left with an option towards renegotiating the contract after taking into account different sets of circumstances as regards to the issues concerning the supply and deliverance if fabrics. On the part of Red Star Holdings, it is their obligation towards providing the information regarding the adverse repercussions from usage of their product. Moreover, there is a visible moral dilemma involving Matt considering the fact that despite being knowledgeable regarding adverse effects such as skin rashes that arising out of using these fabrics, he did not considered it prudent to convey the information to Red Star Holdings.
Gao and Kerstetter (2016) advocated that the ethical negotiation can be undertaken through the initiative of taking the righteous step irrespective of the consequences. On the other hand, it is stated that being ethical on the part of being a negotiator is akin to diminishing the degree of advantage one has. While undertaking negotiation tactics by Matt, in order to streamline the agreement between him and Red Star, it requires to be demonstrated that such tactics are bereft of any wrongdoing. Moreover, Matt requires ensuring that such tactics are harmless and tend to produce positive outcomes coupled with good consequences that is considered pertinent to the situation.
In terms of addressing the issues regarding ethical and moral repercussions, it is relevant that Matt ensures applications of negotiation tactics are initiated. Moreover, Matt is required to ensure that suppression of relevant facts relating to the agreement are facilitated. Moreover, a negotiation that results towards a sustainable degree of development tends to facilitate sharing of benefits to both parties to an organization. Moreover, Matt requires to take into account the long-term repercussion of the short term benefits derived from negotiations. Further, the likelihood of a reputational risk concerning Matt and his clothing business tend to arise in circumstances where there is presence of an unethical behavior in terms of negotiations. Rui, and Xue-dang (2013) stated the fact that absence of unethical behavior in negotiation tend to result in enhancing the probability of a party into entering onto other sets of negotiation. Thereby, it can be construed that the Matt stands to benefit from an ethical approach toward negotiations.
References and Bibliography:
Aspeteg, J. and Karlsson, J., 2014. A Swedish perspective of business negotiation in a cross-cultural context: A multiple case study on B2B level regarding business negotiations in China and how cultural differences has an impact.
Bickenbach, F., Liu, W.H. and Li, G., 2015. The EU-China bilateral investment agreement in negotiation: Motivation, conflicts and perspectives(No. 95). Kiel Institute for the World Economy (IfW
Cho, J., Rhee, H.C. and Woo, K., 2013. Industrial and Employment Effect of China-Korea FTA: Negotiation Strategy and Institutional Preparation for Countries Seeking for FTA with China. Engineering Economics, 24(2), pp.99-110.
Du, Y., 2016. Identity Negotiation and Perceptual Change: Examining the Confucius Institute’s Effects on Perceptions of China (Doctoral dissertation, George Mason University).
Gao, F., 2016. Negotiation from” in the air” to” on the ground”: employment relation between pilots and C Airlines in China (Doctoral dissertation, Massachusetts Institute of Technology).
Gao, J. and Kerstetter, D.L., 2016. Using an intersectionality perspective to uncover older Chinese female’s perceived travel constraints and negotiation strategies. Tourism Management, 57, pp.128-138
Liu, L.S., 2014. A search for a place to call home: Negotiation of home, identity and senses of belonging among new migrants from the People’s Republic of China (PRC) to New Zealand. Emotion, Space and Society, 10, pp.18-26.
Rui, Z.H.U.A.N.G. and Xue-dang, Z.H.E.N.G., 2013. The Negotiation Strategy on Trade in Goods of China-Japan-Korea FTA: An Analysis Based on Trade Competition between Japan and Korea in Chinese Market. International Economics and Trade Research, 7, p.002.
Xiao, H. and Ma, Z., 2015. Business ethics in Canada, China and Taiwan: A three-culture study on the perceived ethicality of negotiation strategies. Nankai Business Review International, 6(2), pp.106-127.
Ying, Y.A.N.G., 2013. The Impact of Cultural Differences on Sino-American Business Negotiation. Journal of Huaihai Institute of Technology (Humanities & Social Sciences Edition), 2, p.012.
Zhang, Y., 2016. China and liberal hierarchies in global international society: power and negotiation for normative change. International Affairs, 92(4), pp.795-816.
Zhong, Z., Luo, J. and Zhang, M., 2015. Analysis of Tourist Leisure Activities in Integrated Resorts Based on the Constraint Negotiation Strategies. Journal of Service Science and Management, 8(3), p.339
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